In Roberts, the plaintiff nurse alleged that she worked for a hospital “8 to 12 hours of unpaid overtime each workweek,” reiterating this allegation repeatedly in her deposition. However, the hospital demonstrated that plaintiff was responsible for submitting her own timesheets and was paid for hundreds of hours of overtime work during the period in question. Rejecting plaintiff’s assertion that the supervisor with whom she would meet at the end of her shift should have known that she was off-the-clock when they met and further should have known that she did not correct her timesheets after those meetings to ensure that all work time was captured, the court observed that the supervisor had 40 to 50 subordinate employees and it was not reasonable to expect him to be aware of who was on the clock and when. Rather, it was plaintiff’s duty to report her work time.

Defending hours worked allegations in FLSA litigation in the absence of time records is a frustrating and time consuming process. Development and enforcement of proper procedures is essential.

In Bana, the court reviewed a trial court’s finding that the plaintiff failed to establish uncompensated overtime work, despite his testimony that at times he worked an uncompensated sixth shift on a Saturday. Based on this testimony, plaintiff’s counsel urged that the Court should have “credit[ed] this testimony and “analyze[d] whether the hours claimed by Plaintiff [were] reasonable in light of the evidence on [sic] the records [sic].” The trial court had not credited the testimony, instead crediting the employer’s rebuttal testimony that “when [Plaintiff] did [work on Saturday] he had taken off a day during the week.” Because the record permitted the Court to weigh this competing evidence and make a credibility determination, the Ninth Circuit held that the lower court’s finding did not violate the Mt. Clemens standard and was not “legal error.”

Records of hours worked remain the best (and most streamlined) defense to a claim of uncompensated overtime work. In the absence of such records, however, this case reiterates that employers are not completely defenseless.

]]>https://www.wageandhourlawupdate.com/2015/03/articles/wage-and-hour/hours-of-work/ninth-circuit-upholds-trial-courts-finding-rejecting-allegation-of-unpaid-sixth-day-of-work-despite-absence-of-employer-records/feed/0Eleventh Circuit Upholds District Court’s Rejection of Challenge to Employer Recordshttps://www.wageandhourlawupdate.com/2014/11/articles/wage-and-hour/hours-of-work/eleventh-circuit-upholds-district-courts-rejection-of-challenge-to-employer-records/
https://www.wageandhourlawupdate.com/2014/11/articles/wage-and-hour/hours-of-work/eleventh-circuit-upholds-district-courts-rejection-of-challenge-to-employer-records/#respondWed, 05 Nov 2014 16:58:12 +0000http://www.wageandhourlawupdate.com/?p=2083Continue Reading]]>Employers defending FLSA overtime claims brought by employees are often frustrated when such claims include alleged “off the clock” work despite the fact that the business properly maintained records of hours worked. A new decision rejects one such allegation. Gilson v. Indaglo, Inc., 2014 U.S. App. LEXIS 20828 (11th Cir. 2014).

The sales employee plaintiffs in Gilson argued that because data reflecting when sales were entered into the system did not match up with their records of hours worked, some sales work must have occurred on-the-clock, because “sales commissions were credited to [their] accounts on days when [they] were calendared as not working.” The appellate court observed that plaintiffs “did not dispute, however, that sales commission dates reflected the day when the sale paperwork was completed, not when the salesperson initiated the sale . . . [and also] failed to produce documentary evidence or state with specificity particular dates on which their actual work hours were not accurately reflected in the employer’s records.” Thus, the district court’s granting of summary judgment to the employer was affirmed.

Employee-created, properly-maintained records of hours worked remain an employer’s best defense to overtime claims premised on alleged “off the clock” work initiated by non-exempt employees.

]]>https://www.wageandhourlawupdate.com/2014/11/articles/wage-and-hour/hours-of-work/eleventh-circuit-upholds-district-courts-rejection-of-challenge-to-employer-records/feed/0Illinois Enacts Pay Card Legislationhttps://www.wageandhourlawupdate.com/2014/08/articles/wage-and-hour/recordkeeping-wage-and-hour/illinois-enacts-pay-card-legislation/
https://www.wageandhourlawupdate.com/2014/08/articles/wage-and-hour/recordkeeping-wage-and-hour/illinois-enacts-pay-card-legislation/#respondMon, 11 Aug 2014 19:06:49 +0000http://www.wageandhourlawupdate.com/?p=1983Continue Reading]]>Joining the ranks of states which have enacted a specific statute to address the payment of wages via payroll debit card, Illinois Governor Pat Quinn last Wednesday signed legislation regulating payroll debit card practices in the state. The new law is generally consistent with the Illinois Department of Labor’s recent historical enforcement practice, in that it forbids making use of the cards a condition of employment, and preserves an employee’s right to demand payment of wages via paper check or direct deposit payment. Employers also must obtain written consent from employees paid through a payroll card program, and the program cannot be linked to forms of credit such as overdraft fees, cash advances or loans against future wages.

“HB 5622 does little to modify the law in Illinois; it simply codifies and clarifies it. Most of its provisions are consistent with informal interpretations the Department had already provided, and common sense approaches we have been recommending to employers for years,” observed Chicago-based Jackson Lewis Shareholder Neil Dishman.

Although some states have enacted legislation and/or issued formal guidance regarding this increasingly common payroll debit card practice, in many states the law is unclear. Multi-state employers must analyze the wage payment options available to them in all jurisdictions in which they do business and seek legal counsel as needed.

]]>https://www.wageandhourlawupdate.com/2014/08/articles/wage-and-hour/recordkeeping-wage-and-hour/illinois-enacts-pay-card-legislation/feed/0Fifth Circuit Confirms Employer’s Right To Set Workweek For Payroll Purposeshttps://www.wageandhourlawupdate.com/2014/07/articles/department-of-labor/fifth-circuit-confirms-employers-right-to-set-workweek-for-payroll-purposes/
https://www.wageandhourlawupdate.com/2014/07/articles/department-of-labor/fifth-circuit-confirms-employers-right-to-set-workweek-for-payroll-purposes/#respondMon, 21 Jul 2014 15:47:49 +0000http://www.wageandhourlawupdate.com/?p=1951Continue Reading]]>Employees may have an understanding of their own “work week” for various employment purposes based on different business practices or employer scheduling. However, with respect to calculating hours worked for purposes of determining overtime pay under the FLSA, DOL regulations simply require that an employer designate and use a standard work week for a given employee. This principle was recently reiterated by the Court of Appeal for the Fifth Circuit. Johnson v. Heckmann Water Res. (CVR), 2014 U.S. App. LEXIS 13501 (5th Cir. July 14, 2014).

In Johnson, plaintiffs alleged that their overtime pay was under-calculated because the employer used a Monday to Sunday work week as opposed to a Thursday to Wednesday work week which they alleged was “their actual, seven consecutive day, Thursday through Wednesday work schedule.” The Circuit court ruled that, because the employer applied the Monday-to-Sunday work week consistently, this calculation of hours worked conformed to the FLSA’s requirements as interpreted in DOL regulation (29 C.F.R. § 778.105), a 2009 DOL opinion letter and the Eighth Circuit’s prior decision in Abshire v. Redland Energy Services, L.L.C., 695 F.3d 792 (8th Cir. 2012) involving “nearly identical facts.”

Consistent application of compliant calculation methods is one key to FLSA compliance, both in terms of computing hours worked and resulting overtime pay due.

]]>https://www.wageandhourlawupdate.com/2014/07/articles/department-of-labor/fifth-circuit-confirms-employers-right-to-set-workweek-for-payroll-purposes/feed/0Fifth Circuit Affirms FLSA Summary Judgment Based On “Complete Lack Of Evidence” Of Off-the-Clock Workhttps://www.wageandhourlawupdate.com/2014/02/articles/wage-and-hour/hours-of-work/fifth-circuit-affirms-flsa-summary-judgment-based-on-complete-lack-of-evidence-of-off-the-clock-work/
https://www.wageandhourlawupdate.com/2014/02/articles/wage-and-hour/hours-of-work/fifth-circuit-affirms-flsa-summary-judgment-based-on-complete-lack-of-evidence-of-off-the-clock-work/#respondFri, 21 Feb 2014 21:32:34 +0000http://www.wageandhourlawupdate.com/?p=1738Continue Reading]]>Last week, the United States Court of Appeals for the Fifth Circuit affirmed the holding of a Texas district court that “an unsubstantiated and speculative estimate of uncompensated overtime does not constitute evidence sufficient to show the amount and extent of that work as a matter of just and reasonable inference.” Ihegword v. Harris County Hosp. Dist., 2014 U.S. App. LEXIS 2669 (5th Cir. Feb. 12, 2014). The plaintiff in the case—a registered nurse—claimed that she often worked overtime without compensation in violation of the Fair Labor Standards Act (“FLSA”). More specifically, the plaintiff claimed her supervisor instructed her to “clock out” and complete her work “off the clock.”

The Fifth Circuit rejected the plaintiff’s claims and affirmed the grant of summary judgment in favor of the employer because, although the plaintiff submitted a declaration in response to the summary judgment motion stating that she regularly worked 12 hours of uncompensated overtime per workweek, her own deposition testimony (as well as the declarations of co-workers) contradicted this assertion. At deposition, Plaintiff testified that she could not remember “how often she worked overtime and that on the days she remember[ed] working overtime, it could have been ‘three or two or one’ hours.” Moreover, the employer had a well-disseminated policy forbidding unauthorized overtime, and time card reports showed that plaintiff rarely worked a full forty-hour workweek. Without specifically relying on the so‑called “sham affidavit doctrine,” the Fifth Circuit concluded that the employer’s evidence “soundly refuted” plaintiff’s “unsubstantiated assertions” contained in her affidavit.

Ihegword reinforces the importance to all employers of maintaining specific policies to address reporting hours worked and the importance of systematic record-keeping.

]]>https://www.wageandhourlawupdate.com/2014/02/articles/wage-and-hour/hours-of-work/fifth-circuit-affirms-flsa-summary-judgment-based-on-complete-lack-of-evidence-of-off-the-clock-work/feed/0Seventh Circuit Rejects Claim For Alleged Unpaid Wages Finding Construction Firm Lacked Actual or Constructive Knowledge of Alleged Workhttps://www.wageandhourlawupdate.com/2014/01/articles/wage-and-hour/hours-of-work/seventh-circuit-rejects-claim-for-alleged-unpaid-wages-finding-construction-firm-lacked-actual-or-constructive-knowledge-of-alleged-work/
https://www.wageandhourlawupdate.com/2014/01/articles/wage-and-hour/hours-of-work/seventh-circuit-rejects-claim-for-alleged-unpaid-wages-finding-construction-firm-lacked-actual-or-constructive-knowledge-of-alleged-work/#respondTue, 07 Jan 2014 15:24:15 +0000http://www.wageandhourlawupdate.com/?p=1672Continue Reading]]>While the FLSA’s “suffer or permit” standard is broad, it is not without limit. Building on a prior decision, the Court of Appeals for the Seventh Circuit reviewed several purported justifications for imputing knowledge of alleged additional work asserted by a construction employee and rejected claims of alleged unpaid wages asserted by the former employee. Gaines v. K-Five Constr. Corp., 2014 U.S. App. LEXIS 133 (7th Cir. 2014).

Plaintiff Gaines, a truck driver, offered three separate evidentiary bases for finding his employer had knowledge of alleged uncompensated work performed before his shift: (i) his own handwritten notation on some Daily Driver Reports (DDR) of an earlier start time than his scheduled start; (ii) testimony from a supervisor that Plaintiff was “always at work early”; and (iii) his own testimony that for some period of time certain supervisors would wait by his truck before his start time. Citing Kellar v. Summit Seating, Inc., 664 F.3d 169, 177 (7th Cir. 2011), the Circuit rejected each of these as a basis for reversing the trial court’s grant of summary judgment to the employer. As to the first, the Court relied on unrebutted testimony that the payroll processer relied only on the official times entered at the top of DDRs, and did not scrutinize the entire form for additional notation from employees. As to the latter two, the Court ruled, as it had in Kellar, that it could not envision “a reasonable inference [by a jury] that anybody knew [Plaintiff was working] based on the simple fact that K-Five supervisors may have seen Gaines come to work early.” More broadly, the Court observed that Plaintiff offered “no evidence that, for the almost three years he was [allegedly] periodically working an extra 15 minutes at the start of his shift, he told anyone that he was working unauthorized overtime or that his notations at the bottom of his DDR were meant to indicate as such.”

Gaines reinforces the importance of a clear, formal, transparent timekeeping process, and appropriate employee training regarding the reporting of work time. Where such processes are in place, an employer is more capable of defending allegations of alleged uncompensated work time.

]]>https://www.wageandhourlawupdate.com/2014/01/articles/wage-and-hour/hours-of-work/seventh-circuit-rejects-claim-for-alleged-unpaid-wages-finding-construction-firm-lacked-actual-or-constructive-knowledge-of-alleged-work/feed/0Tenth Circuit Affirms District Court Ruling Rejecting “Off-the-Clock” Claimhttps://www.wageandhourlawupdate.com/2012/12/articles/wage-and-hour/hours-of-work/tenth-circuit-affirms-district-court-ruling-rejecting-off-the-clock-claim/
https://www.wageandhourlawupdate.com/2012/12/articles/wage-and-hour/hours-of-work/tenth-circuit-affirms-district-court-ruling-rejecting-off-the-clock-claim/#respondMon, 03 Dec 2012 12:29:17 +0000http://wagehourlaw.wp.lexblogs.com/2012/12/tenth-circuit-affirms-district-court-ruling-rejecting-off-the-clock-claim/Continue Reading]]>The federal regulations to the FLSA impose recordkeeping burdens on employers (see, e.g., 29 CFR § 516.2) but those same records are most vital in assisting employers’ defense of claims of unrecorded work hours ("off the clock" claims). That utility was exemplified this week by a new decision from the Court of Appeals for the Tenth Circuit, Brown v. Scriptpro, 2012 U.S. App. LEXIS 24364 (10th Cir. 2012).

In Brown, the parties did not dispute that the plaintiff, a non-exempt employee, had performed some unrecorded work remotely, and the district court concurred that such off-the-clock work was performed. However, the lower court also found that the plaintiff failed to establish "the amount of [unpaid] overtime by justifiable or reasonable inference." In affirming that ruling, the Tenth Circuit observed that "[i]t is undisputed that ScriptPro keeps accurate records, and employees can even access the timekeeping system from home. Mr. Brown easily could have entered his hours; in fact, he was required to do so. There was no failure by ScriptPro to keep accurate records, but there was a failure by Mr. Brown to comply with ScriptPro’s timekeeping system." Thus, under such circumstances, Plaintiff’s failure to comply was fatal to his later claim of off-the-clock work.

Brown highlights the need for employers to have clearly articulated and duly enforced policies regarding the recording of work time.

]]>https://www.wageandhourlawupdate.com/2012/12/articles/wage-and-hour/hours-of-work/tenth-circuit-affirms-district-court-ruling-rejecting-off-the-clock-claim/feed/0Wage Theft Prevention Act: Expanded Coveragehttps://www.wageandhourlawupdate.com/2010/12/articles/states/new-york-state/wage-theft-prevention-act-expanded-coverage/
https://www.wageandhourlawupdate.com/2010/12/articles/states/new-york-state/wage-theft-prevention-act-expanded-coverage/#respondThu, 23 Dec 2010 17:12:26 +0000http://wagehourlaw.wp.lexblogs.com/2010/12/wage-theft-prevention-act-expanded-coverage/Continue Reading]]>As previously noted here, New York Governor David Paterson has signed into law the Wage Theft Prevention Act. The new law amends the New York Labor Law to create new recordkeeping obligations for employers, as well as significantly greater damages for violations of the Labor Law than previously were available.

]]>https://www.wageandhourlawupdate.com/2010/12/articles/states/new-york-state/wage-theft-prevention-act-expanded-coverage/feed/0I Can’t Go To Jail For Wage and Hour Recordkeeping Violations – Or Can I?https://www.wageandhourlawupdate.com/2010/10/articles/wage-and-hour/recordkeeping-wage-and-hour/i-cant-go-to-jail-for-wage-and-hour-recordkeeping-violations-or-can-i/
https://www.wageandhourlawupdate.com/2010/10/articles/wage-and-hour/recordkeeping-wage-and-hour/i-cant-go-to-jail-for-wage-and-hour-recordkeeping-violations-or-can-i/#respondFri, 22 Oct 2010 16:05:58 +0000http://wagehourlaw.wp.lexblogs.com/2010/10/i-cant-go-to-jail-for-wage-and-hour-recordkeeping-violations-or-can-i/Continue Reading]]>As most employers know, the United States Department of Labor has extensive regulations regarding the nature and scope of records employers covered by the Act must maintain. See 29 CFR § 516.1, et seq. Many state laws contain analogous provisions. See, e.g. NY Labor Law § 195. While violations of these recordkeeping requirements can lead to civil penalties, (standing alone a reason for compliance), wage records can be even more important as evidence of hours worked in defending claims for alleged unpaid overtime. See our earlier discussion regarding the implications of failing to maintain such records for the defense of wage/hour claims here.

However, employers also need to understand that falsification of wage and benefits records can also give rise to criminal penalties. The recent New York State court decision in People v Saxton, 2010 NY Slip Op 6011, 1 (3d Dep’t 2010) is exemplary. In Saxton a New York state appeals court reviewed the jury conviction of the former executive of a failing business on three counts, including “falsifying business records in the first degree.”

The Defendant, Richard Saxton, had been the officer of a fledgling Internet start-up, Wurld Media, Inc. He supervised the company’s payroll and its general ledger. When Wurld Media encountered serious financial difficulty, it suspended payroll (a likely wage-and-hour violation itself), and instituted an “advance” program, wherein employees who had not received their regular paychecks could “request an advance of money when needed.” Wurld Media, through Defendant, listed these payments as loans, not wage payments, and as such did not pay taxes on these amounts.

After Wurld Media employees complained to the criminal authorities regarding the company’s failure to pay wages, an investigation was conducted giving rise to a nine-count indictment which included charges of: 1) offering a false instrument for filing in the first degree (two counts); 2) falsifying business records in the first degree, 3) failure to withhold income taxes, 4) failure to pay benefits, 5) grand larceny in the second degree, 6) grand larceny in the third degree, 7) criminal contempt in the second degree, and 8) money laundering in the fourth degree. Saxton was convicted on several of these charges.

In upholding Saxton’s conviction for falsifying business records, the appeals court cited evidence in the record “[that] payroll taxes were not withheld from those advances, that Wurld Media recorded those advances as loans on the general ledger and that defendant signed two quarterly tax reports that did not reflect that those advances were, in fact, payroll to avoid payroll tax liabilities.”

Saxton is not an isolated case. In 2008, a prominent New York restaurateur was arraigned on 242 counts of, among other offenses, failing to pay wages, falsifying business records and defrauding the state unemployment insurance system. See “The American Dream, Delivered Perhaps Too Much on the Cheap” (The New York Times December 18, 2008). Failure to maintain proper wage records can have serious ramifications for a business. Creating and maintaining false ones is, unsurprisingly, even more dangerous for employers and executives.